In the United States and throughout North America,
NAFTA has accelerated the industrial consolidation of agriculture and
pushed out smaller, more sustainable food producers

NAFTA opened the doors for a flood of subsidized agricultural products and large-scale consolidation, eviscerating small farmers on both sides of the U.S.-Mexico border. (Photo: Bread for the World / Flickr)

One of the clearest stories to emerge in the two decades since the
North American Free Trade Agreement (NAFTA) was implemented is the
devastation wreaked on the Mexican countryside by dramatic increases in
imports of cheap U.S. corn.

But while Mexican farmers, especially small-scale farmers,
undoubtedly lost from the deal, that doesn’t mean that U.S. farmers have
won. Prices for agricultural goods have been on a roller coaster of
extreme price volatility — caused by unfair agriculture policies and
recklessly unregulated speculation on commodity markets, as well as by
increasing droughts and other climate chaos. Each time prices take their
terrifying ride back down, more small- and medium-scale farmers are
forced into bankruptcy, concentrating land ownership and agricultural
production into ever fewer hands.

Corporate Consolidation

It’s hard to separate the impacts of NAFTA from another big change in
U.S. farm policy: the 1996 Farm Bill. That legislation set in place a
shift from supply management and regulated markets to a policy of “get
big or get out.” Farmers were encouraged to increase production with the
promise of expanded export markets — including to Mexico. But almost
immediately, commodity prices dropped like a stone, and Congress turned
to “emergency” payments — later codified as farm subsidies — to clean up
the mess and keep rural economies afloat.

Then, as new demand for biofuels increased the demand for corn, and
as investors turned away from failing mortgage markets to speculate on
grains, energy, and other commodities, prices soared. It wasn’t only the
prices of farm goods that rose, however. Prices also increased for
land, fuel, fertilizers, and other petrochemical-based agrochemicals. As
a result, net farm incomes became much more erratic.

In many ways, the family farmers who had been the backbone of U.S.
rural economies really did either get big or get out, leaving a sector
marked by inequality and corporate concentration. Over the last 20
years, there has been a marked shift in the size of U.S. farms, with the
numbers of very small farms and very large farms increasing
dramatically. The increase in the number of small farms is due to
several factors, including urban dwellers returning to the land (almost
all of whom rely on off-farm jobs to support themselves), and the growth
in specialty crops for local farmers’ markets. According to USDA
researchers Robert Hoppe, James MacDonald, and Penni Korb, the number of
farms in the middle — small operations that are commercially viable on
their own — dropped by 40 percent, from half of total farms in 1982 to less than a third in 2007.

During this process of farm consolidation, corporations involved in
agriculture and food production also consolidated. Mary Hendrickson at
the University of Missouri has calculated the share of production held
by just four firms in different sectors. In total beef production, for
example, the share of the top four firms (Cargill, Tyson, JGF, and
National Beef) increased from 69 percent in 1990 to 82 percent in 2012.
The story is the same in poultry, pork, flour milling, and other
sectors. Fewer firms control bigger and bigger shares of total
production, making it harder for other farmers to get fair prices or
earn a living from their production.

Trade Agreements

Enter the free trade agreements. As corporations consolidated in the
United States, they grew even larger by taking advantage of provisions
in NAFTA that let them operate across borders. For example, U.S.-based
corporations can grow cattle in Canada and pork in Mexico, and then
bring their products back to the United States for slaughter and sale.
Efforts to label these meats under Country of Origin Labeling laws have
been vigorously opposed by the Mexican and Canadian governments. As a
result of these advantages to large-scale growers, independent hog and
poultry producers in the United States have virtually disappeared.
Meanwhile the factory farms contribute to growing environmental
devastation in all three countries.

Over time, the U.S. public has gained a growing appreciation of the
need to change food and farm policies to ensure healthier foods and more
stable rural economies. But policymakers in Congress and the Obama
administration continue to support the same failed policies. They
advocate for more free trade agreements, including the Trans-Pacific
Partnership and the Transatlantic Trade and Investment Partnership.
These are largely cut and pasted from NAFTA, but with a twist: they add
dangerous new provisions that would limit any remaining restrictions on
genetically modified organisms (GMOs), permit questionable food
additives, and pave the way for even more questionable emerging
technologies. A “new” U.S. Farm Bill currently being negotiated shifts
the emphasis from commodity support to crop insurance, while locking in
place advantages for even bigger farms and corporations. And it
perpetuates the same willful ignorance of the devastating impacts of
droughts and flooding caused by climate change.

The wild ride of prices under the NAFTA roller coaster has left us a
food system that is dominated by fewer and bigger corporations. In many
communities across the country, people are opting out of the existing
Big Food system to rebuild smaller, healthier options that are rooted in
local economies and nurture connections between farmers and consumers.
Whether those experiences can scale up from local experiences to
national agriculture, and whether they can change policy, is a big
question — one made harder by the overwhelming dominance of corporate
interests. But rebuilding the system from the ground up, and considering
how to make fairer links to farmers in Mexico and elsewhere, is really
the only path forward.